New Delhi: Officials from India and the UK are expected to convene soon for the next phase of discussions concerning the proposed free trade agreement (FTA). The purpose of this upcoming dialogue is to address and reconcile discrepancies on various fronts, including a social security pact, matters related to automobiles and medical devices, and facilitating the movement of professionals, as per an official source.
The forthcoming 14th round of negotiations may witness the UK delegation visiting India to expedite the discussions and bring them to a conclusive stage.
“While virtual sessions are underway, plans are in motion for a comprehensive round of discussions. During such comprehensive discussions, both sides delve into all aspects, often conducting around 60-70 concurrent sessions,” mentioned an unnamed official familiar with the matter.
Several issues await resolution, encompassing rules of origin, intellectual property rights (IPRs), social security agreements, and duty waivers on various products like electric vehicles, scotch whiskey, lamb meat, chocolates, and specific confectionary items. Furthermore, talks also encompass the relaxation of regulations in service sectors such as banking and insurance.
Simultaneously, negotiations are advancing concerning the proposed bilateral investment treaty (BIT) between India and the UK. These investment treaties are pivotal in fostering and safeguarding investments in each other’s territories. However, a primary point of contention revolves around the mechanism for settling disputes.
India has advocated for exhausting all local judicial remedies for dispute resolution before initiating international arbitration. The FTA talks between India and the UK, initiated in January 2022, aimed to conclude by Diwali in October 2022 but faced delays due to political developments in the UK.
This agreement spans 26 chapters encompassing goods, services, investments, and intellectual property rights. India’s industry seeks increased opportunities for skilled professionals, particularly from IT and healthcare sectors, in the UK market, along with better access for various goods at zero customs duties.
Conversely, the UK is pushing for substantial reductions in import duties on goods like scotch whiskey, automobiles, lamb meat, chocolates, and certain confectionary items. Additionally, Britain aims to expand UK service offerings in India’s telecommunications, legal, and financial service sectors.
Bilateral trade between India and the UK surged to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22. The ‘rules of origin’ provision plays a crucial role in prescribing minimal processing within the FTA country, preventing third-party goods from entering the Indian market without adequate value addition, thereby curbing the dumping of goods.